New York fraud case costs Dell $4m

Dell to change advertising, sales and financing

By Sumner Lemon | 16 September 09

Dell will pay $4 million to settle charges of fraudulent and deceptive business practices brought against the company by New York's Office of the Attorney General.

The New York attorney general filed suit against Dell in 2007, charging that the company misled customers by charging high credit rates when they were promised cheap financing. The suit also alleged Dell didn't provide customers with full details of its next-day service program and didn't deliver promised rebates and warranties.

In May 2008, New York's Supreme Court ruled on the lawsuit, finding Dell guilty of fraud, false advertising, deceptive business practices and abusive debt collection practices.

In addition to the $4 million payment, Dell also agreed to change its advertising, sales and finance practices. The settlement requires Dell to disclose detailed information about the level of service customers will receive and the estimated percentage of customers who qualify for low-cost financing.

"Today's announcement is the final step in ensuring New Yorkers harmed by Dell's deceptive and illegal business practices are fully compensated," said Attorney General Andrew M Cuomo said in a statement announcing the settlement.

New Yorkers harmed by Dell's business practices covered in the lawsuit can file an application for restitution online, the Office of the Attorney General said.